New York Federal Reserve President William DudleyEvent: Speech, interviewTaper?: Sets a high bar for taper, seeing insufficient
evidence that the recovery is either sufficient or sustainable. Notable quote: "Although the neutral rate should gradually
normalize over the long-run as economic fundamentals continue to improve and
headwinds abate, this process will likely take many years. In the
meantime, the federal funds rate level consistent with the Committee’s
objectives of maximum sustainable employment in the context of price
stability will likely be well below the long-run level."

St. Louis Federal Reserve President James BullardEvent:SpeechTaper?: September was a close call, October possibleNotable
quote: “We said it was data dependent,” Bullard told reporters
after a speech in New York. “It turned out it was data dependent. It
enhanced our credibility in the sense that it showed we really are paying
attention to the data.”

Federal Reserve Governor Jeremy SteinEvent: SpeechTaper?: September close, but he supported holding back.
Likely would not oppose taper.Notable Quote: "...my personal preference would be to make
future step-downs a completely deterministic function of a labor market
indicator, such as the unemployment rate or cumulative payroll growth over
some period. For example, one could cut monthly purchases by a set amount
for each further 10 basis point decline in the unemployment rate."

Minneapolis Federal Reserve President Narayana KocherlakotaEvent:SpeechTaper?: Believes the Fed should do more,
not necessarily more QE. Notable Quote: "Doing whatever it takes in the next few
years will mean something different. It will mean that the FOMC is willing
to continue to use the unconventional monetary policy tools that it has
employed in the past few years. Indeed, it will mean that the FOMC is
willing to use any of its congressionally authorized tools to
achieve the goal of higher employment, no matter how unconventional those
tools might be." Shades of Draghi, no?

Dallas Federal Reserve President Richard FisherEvent:SpeechTaper?: Hell, yes, that's how we do it in Texas.Notable Quote: "Here is a direct quote from the summation
of my intervention at the table during the policy “go round” when Chairman
[Ben] Bernanke called on me to speak on whether or not to taper: “Doing
nothing at this meeting would increase uncertainty about the future conduct
of policy and call the credibility of our communications into question.” I
believe that is exactly what has occurred, though I take no pleasure in
saying so."

Kansas City Federal Reserve President Esther GeorgeEvent:
SpeechTaper?: If you need to ask, you aren't paying attention.Notable Quote: "Delaying action not only allows potential
costs to grow, it also has the potential to threaten the credibility and the
predictability of future monetary policy actions. Policy moves that surprise
the market often result in additional volatility. And by deciding that it
needs to await further data, the Committee is suggesting its desire to be
“data dependent” involves putting more emphasis on the most recent data
points, which can be volatile and subject to revision,rather than on its own
medium-term view of the economy."

Chicago Federal Reserve President Charles EvansEvent:Speech
(FYI: Great slides!)Taper?: Close call, could still be this year.Notable
Quote: The Fed's current monetary policy "admits the
possibility of overshooting our inflation objectives," Evans said..."We
could even do this as long as inflation was below 3 pct because I think
symmetry around the inflation target is incredibly important," he added.

Richmond Federal Reserve President Jeffery LackerEvent:SpeechTaper?:
Yes, never a supporter in the first place.Notable Quote: "Yielding to the temptation to implicitly
renege by reworking decision criteria or citing unforeseen economic
developments may have short-term appeal, but widely perceived discrepancies
between actual and foreshadowed behavior will inevitably erode the faith
people place in future central bank statements."

Atlanta Federal Reserve President Dennis LockhartEvent:
Speech (Topic is productivity, indirect reference to monetary policy),
interviewTaper?: Close call in September, probably not October, but
Lockhart will fall in line with whatever is the FOMC concensus. Notable Quote: “In the short time between now and the
October meeting, I don’t think there will be an accumulation of enough
evidence to dramatically change the picture” about where the economy now
stands, Mr. Lockhart said.

Bottom Line: Is that clear yet? My attempt to summarize:

There is broad support/willingness to start the tapering process as soon
as the data allows. In general, even the doves believe that it is the
stock, not flow, that matters, and at this point a small taper will have
little impact on the stock. Earliest timing is December. If the government
shuts down, they might not even have an employment report for the October
meeting. That's going to open up a whole Friday on everyone's calendar.

Financial stability would add to the case for tapering. The Fed does
not want tapering to be a signal about interest rate policy. If they
believe taper talk has only raised the term premium, but is not affecting
the expected path of policy, they will be more likely to taper. Read the
Stein speech.

You see constant reminders that tapering is not tightening, and that
more accommodation could be provided via forward guidance. This is the
direction the Fed wants to go.

There is some push to include an even looser inflation threshold than
the current 2.5%. I think this is limited to Kocherlakota and Evans. Maybe
Yellen, but we will need to wait until her confirmation before we here from
her again.

I think we will see more effort to convince us that the commitment to a
long-term low-rate environment is credible. I think this is difficult if
they continue to place numeric objectives such as the 6.5% unemployment
threshold that suggest the Fed will behave responsibly with respect to their
inflation target. In short, the Fed is trying hard to balance stable
long-term inflation expectations against the possibility of irresponsible
policy in the short-run. This is a difficult message to communicate.

New York Federal Reserve President William DudleyEvent: Speech, interviewTaper?: Sets a high bar for taper, seeing insufficient
evidence that the recovery is either sufficient or sustainable. Notable quote: "Although the neutral rate should gradually
normalize over the long-run as economic fundamentals continue to improve and
headwinds abate, this process will likely take many years. In the
meantime, the federal funds rate level consistent with the Committee’s
objectives of maximum sustainable employment in the context of price
stability will likely be well below the long-run level."

St. Louis Federal Reserve President James BullardEvent:SpeechTaper?: September was a close call, October possibleNotable
quote: “We said it was data dependent,” Bullard told reporters
after a speech in New York. “It turned out it was data dependent. It
enhanced our credibility in the sense that it showed we really are paying
attention to the data.”

Federal Reserve Governor Jeremy SteinEvent: SpeechTaper?: September close, but he supported holding back.
Likely would not oppose taper.Notable Quote: "...my personal preference would be to make
future step-downs a completely deterministic function of a labor market
indicator, such as the unemployment rate or cumulative payroll growth over
some period. For example, one could cut monthly purchases by a set amount
for each further 10 basis point decline in the unemployment rate."

Minneapolis Federal Reserve President Narayana KocherlakotaEvent:SpeechTaper?: Believes the Fed should do more,
not necessarily more QE. Notable Quote: "Doing whatever it takes in the next few
years will mean something different. It will mean that the FOMC is willing
to continue to use the unconventional monetary policy tools that it has
employed in the past few years. Indeed, it will mean that the FOMC is
willing to use any of its congressionally authorized tools to
achieve the goal of higher employment, no matter how unconventional those
tools might be." Shades of Draghi, no?

Dallas Federal Reserve President Richard FisherEvent:SpeechTaper?: Hell, yes, that's how we do it in Texas.Notable Quote: "Here is a direct quote from the summation
of my intervention at the table during the policy “go round” when Chairman
[Ben] Bernanke called on me to speak on whether or not to taper: “Doing
nothing at this meeting would increase uncertainty about the future conduct
of policy and call the credibility of our communications into question.” I
believe that is exactly what has occurred, though I take no pleasure in
saying so."

Kansas City Federal Reserve President Esther GeorgeEvent:
SpeechTaper?: If you need to ask, you aren't paying attention.Notable Quote: "Delaying action not only allows potential
costs to grow, it also has the potential to threaten the credibility and the
predictability of future monetary policy actions. Policy moves that surprise
the market often result in additional volatility. And by deciding that it
needs to await further data, the Committee is suggesting its desire to be
“data dependent” involves putting more emphasis on the most recent data
points, which can be volatile and subject to revision,rather than on its own
medium-term view of the economy."

Chicago Federal Reserve President Charles EvansEvent:Speech
(FYI: Great slides!)Taper?: Close call, could still be this year.Notable
Quote: The Fed's current monetary policy "admits the
possibility of overshooting our inflation objectives," Evans said..."We
could even do this as long as inflation was below 3 pct because I think
symmetry around the inflation target is incredibly important," he added.

Richmond Federal Reserve President Jeffery LackerEvent:SpeechTaper?:
Yes, never a supporter in the first place.Notable Quote: "Yielding to the temptation to implicitly
renege by reworking decision criteria or citing unforeseen economic
developments may have short-term appeal, but widely perceived discrepancies
between actual and foreshadowed behavior will inevitably erode the faith
people place in future central bank statements."

Atlanta Federal Reserve President Dennis LockhartEvent:
Speech (Topic is productivity, indirect reference to monetary policy),
interviewTaper?: Close call in September, probably not October, but
Lockhart will fall in line with whatever is the FOMC concensus. Notable Quote: “In the short time between now and the
October meeting, I don’t think there will be an accumulation of enough
evidence to dramatically change the picture” about where the economy now
stands, Mr. Lockhart said.

Bottom Line: Is that clear yet? My attempt to summarize:

There is broad support/willingness to start the tapering process as soon
as the data allows. In general, even the doves believe that it is the
stock, not flow, that matters, and at this point a small taper will have
little impact on the stock. Earliest timing is December. If the government
shuts down, they might not even have an employment report for the October
meeting. That's going to open up a whole Friday on everyone's calendar.

Financial stability would add to the case for tapering. The Fed does
not want tapering to be a signal about interest rate policy. If they
believe taper talk has only raised the term premium, but is not affecting
the expected path of policy, they will be more likely to taper. Read the
Stein speech.

You see constant reminders that tapering is not tightening, and that
more accommodation could be provided via forward guidance. This is the
direction the Fed wants to go.

There is some push to include an even looser inflation threshold than
the current 2.5%. I think this is limited to Kocherlakota and Evans. Maybe
Yellen, but we will need to wait until her confirmation before we here from
her again.

I think we will see more effort to convince us that the commitment to a
long-term low-rate environment is credible. I think this is difficult if
they continue to place numeric objectives such as the 6.5% unemployment
threshold that suggest the Fed will behave responsibly with respect to their
inflation target. In short, the Fed is trying hard to balance stable
long-term inflation expectations against the possibility of irresponsible
policy in the short-run. This is a difficult message to communicate.